The Passive, Inwardly Focused Organization

In a recent Harvard Business Review (HBR) article the three authors (Neilson, Pasternack, and Van Nuys) described what they called the “Passive-Aggressive Organization.” While we are all familiar with the concept of the passive-aggressive individual, what the authors described in the article does not qualify as passive-aggressive.

Even though I disagree with their passive-aggressive designation, the three authors point out a very serious organizational problem. They describe an organization where conflict is rare, consensus is easy to reach, and problems are graciously overlooked (a “happy” place).

What the authors describe is what I call a “Passive, Inwardly Focused” organization. It’s a serious diagnosis because this type of organization does not have long to live. This organization will soon lose any hope of responding quickly to market changes. They typically remain passive and inwardly focused until they are near death. But as you can imagine, they don’t die happy.

Of course, it is important for organizational members to treat each other in a respectful way, but professionalism also requires the “backbone” to take a stand. In fact, I have been called into several organizations that claimed to have a conflict problem. After data gathering and diagnosis, I told the senior executives that their problem was that they did not have enough conflict. They needed to stir up some debate!

Living in a “happy world” is appropriate for children and smurfs. But, a highly effective organization requires healthy disagreement. Passively accepting the status quo leads to complacency. Questioning the status quo leads to innovation.

Of course, concern for the preferences and work habits of employees has its place, but it must be balanced with the demands of the marketplace. Ultimately, satisfied customers are more important than satisfied employees. If customers are not satisfied, eventually employees will be very unsatisfied. They will be out of work!

In passive, inwardly focused organizations several things can be done. First, match incentives to performance. Second, recognize doers, not “good ole boys (or girls).” Third, establish quantifiable goals. Fourth, bring in outsiders who can shake up the status quo. Fifth, invite (or demand) debate in meetings. Sixth, actively solicit customer complaints and concerns.

It is only a matter of time before passive, inwardly focused organizations experience financial distress. Don’t wait, act now!

Is your organizations “happy” but not productive?

To learn more, read my special report “Overcoming Resistance to Change,” or my book “Strategic Organizational Change,” which are both available on my website www.mikebeitler.com. Also, you can always find free articles on organizational effectiveness topics at www.mikebeitler.com.

Talent Management

When three leading magazines (Harvard Business Review, Business Week, and Training & Development) all have cover stories about talent management the same month, it is safe to say you are looking at a hot topic.

Talent management (the recruiting, training, and retaining of good workers) has had many names over the years, but it is certainly not new. While the topic is not new, how we think about it has evolved over time.

As early as the late 19th century, business organizations turned to universities for help developing their employees. In 1881, Joseph Wharton (co-founder of Bethlehem Steel) persuaded the University of Pennsylvania to create an undergraduate business education program. Soon after, Dartmouth and Harvard followed Wharton’s lead.

In the mid-twentieth century, universities shifted their focus from factory workers to executives. As the importance of manual labor declined, universities abandoned the “hard issues” for the theoretical.

As university programs became more irrelevant, business organizations responded with corporate universities (CUs). CUs (beginning with GE’s in Crotonville, NY) offered company-specific training that was relevant to their companies’ real-world practice.

Training of managers and executives outside of the university setting has become quite sophisticated. In addition to executive MBA programs, both executive coaching and action learning are now widely available. Executive coaching offers one-on-one guidance on many of the emotional intelligence or “soft” skills. Action learning is designed to allow managers and executives to work on real problems and to learn simultaneously.

So what’s the problem Mike? If organizational learning has become more sophisticated, aren’t companies more profitable? Not necessarily. These sophisticated training programs are expensive. Do we know the ROI (return on investment) for these massive investments of time and money?

Also, many companies neglect the fact that training is only part of effective talent management. Talent management also includes recruiting and retention.

Is your company training the right people? Training the wrong people is a waste of limited organizational resources. After you have trained the right people, can you retain them? If not, you are simply training good people for your competitors.

During my consulting work, I have often suspected that most companies are not handling talent management effectively. A recent Society for Human Resource Management (SHRM) study confirmed my suspicions. SHRM found that only 49% of HR professionals believe their organizations effectively identify high-potential employees. That means 51% of companies are wasting a lot of time and money.

Is your organizations part of the 49%, or the 51%?

To learn more, read my special report “Identifying Candidates for Your Succession Plan,” or my book “Strategic Organizational Learning,” which are both available on my website www.mikebeitler.com. Also, you can always find free articles on organizational effectiveness topics at www.mikebeitler.com.

OE Consultants: Is There a Future for Them?

Since my “Death of the OD Practitioner” article was published about a month ago, I have been asked whether Organizational Effectiveness (OE) consultants will experience the same fate. My answer is “no.” Of course, that assumes that OE consultants do not follow the same destructive path that Organization Development (OD) practitioners chose.

OD practitioners made the mistake of not partnering with their clients to produce business results. OD practitioners looked at business executives (their clients) with disdain.
They saw business men and women as bourgeois money-grabbers who didn’t care about their workers. Their anti-business, anti-capitalism, anti-management rhetoric has led to their own demise. (You can’t look down your nose at your business client and expect to stay in business yourself.)

OE consultants, who share a different mindset, will share a different fate. OE consultants respect their clients and serve as business partners. Let me make the following predictions about the future of OE consulting:

1. OE consultants who serve as strategic business partners will rise in status and recognition in their organizations. Salaries will rise too as the value of their expertise becomes more widely recognized. (A value-added approach will be critical to fulfilling this prediction.)

2. The title of Chief Learning Officer (CLO) or Director of Organizational Effectiveness will become commonplace at leading corporations. These positions will be responsible for all organizational learning and change efforts.

3. The role of OD practitioners will continue to decline in importance for two reasons: (a) OD practitioners have not adopted a strategic business partner approach, and (b) many OD practices have already been adopted by mainstream American businesses.

4. OE consultants will become more responsive to the needs of senior management. OE consultants will become a valuable in-house (or independent) source of guidance on tough management issues such as succession planning, the creation and transfer of tacit knowledge, and the development of organizational talent.

5. OE consultants will develop higher levels of consulting skills to increase their value to their clients.

If you are an OE consultant, there are several things you should keep in mind:

Bob Pike has said, “Deliver what is needed, not just what is requested.”

David Ulrich predicts, “Business organizations in the future will compete aggressively for the best talent.”

I have predicted, “In the years ahead, senior executives will be looking for high-level tacit knowledge and experience that will add to their organizations’ core competencies and competitive advantage. These core competencies, in the form of highly developed human capital, will become the organization’s most important form of sustainable competitive advantage.”

How are you going to add value to your organization’s (or your clients’) core competencies and competitive advantage? You can’t stand still in a fast-moving world!

To read my complete article on the “Death of the OD Practitioner,” see the previous post in my blog. You can find my books and free articles on organizational effectiveness at www.mikebeitler.com.

Large-Scale Organizational Change: Look Before You Leap!

I am often asked, “Should organizational change be done quickly or slowly over time?” and “Should management attempt large radical changes or small incremental changes?” The safe answer is, “It depends.”

The literature on organizational change identifies two general types of changes: first-order change and second-order change. First-order change gets less attention because it is less dramatic. It is incremental and evolutionary in nature. We see first-order change today in organizations in the form of quality improvement programs (e.g., TQM or Six Sigma). First-order incremental change is also important after large-scale, organization-wide, second-order change.

Second-order change is discussed more often in management literature because it is dramatic, radical, and revolutionary. The very survival of the organization may depend on these changes. Examples of second-order change include interventions to create and implement a new corporate mission (or strategy) or to completely restructure the organization’s hierarchy. Second-order changes occur rather infrequently, but they get the attention of many interested parties (customers, employees, suppliers, competitors, consultants, management authors, academics, investment analysts, the media, and communities of various kinds).

There is clearly a bias in the management literature toward big changes at high speed. John Kotter, the author of Leading Change, has stated, “To change an organization successfully, you have to make big moves. No matter who you are, there is a tendency to want to take the ball forward only a couple of yards. But that doesn’t work. You can’t coax people into change.”

Jack Welch, the former CEO of GE, said, “Incremental nudges in a world that’s moving in nanoseconds is absolutely not acceptable. Strike boldly when you believe in something. Take action and live with the consequences. If it’s right, soar with it; if it’s wrong, cut your losses and do something else.”

While these comments, from two management-thought leaders, are inspiring, I would recommend that you look before you leap into these large-scale, second-order changes. Keep in mind that two out of three organizational transformation initiatives fail. Many organizations already have a poor track record with organizational change efforts. A poor track record will dampen organizational members’ hopes for success with current large-scale changes.

Also, remember that organizational change is a complex topic. A search on Amazon.com for books on management and change produces a list of over 6,000 titles. Each author has a distinct take on the subject.

I am not against large-scale changes, but they require an ongoing, visible commitment from senior management. Organizational leaders must devote considerable amounts of time to leading the initiative and encouraging “the troops.” Most senior leaders seriously underestimate the time required of them.

Before deciding on a large-scale organizational change, maybe you should look before you leap!

To read more about organizational change, I recommend Leading Change by John Kotter and my book, Strategic Organizational Change. You can find my book and free articles on this subject on my website at www.mikebeitler.com.